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Stretching the School Dollar

State mandates are coming under attack from local governments feeling pain from shrinking state payments. This paragraph in the New York Times'recent article on Texas schools is worth highlighting:

Terry Grier, the superintendent in Houston, said the city stood to lose 15 percent to 20 percent of its total budget. The district could still raise the local property tax rate a few cents and stay under the state-imposed cap, but it would produce nowhere near enough to cover the loss of state money, Mr. Grier said. One way to cushion the blow, he said, would be to lift state rules on class size and to let administrators single out unproductive teachers for layoffs, regardless of their seniority. ?Let us get out from under some of these state mandates,? he said.

Some other districts don't seem to be going down this path of looking for smart cuts, however. The?Wall Street Journal ran articles today ("Cities Act to Gain Budgetary Clout") and yesterday ("Tax Complaint: Too Low") detailing cities' efforts to raise property and income taxes above state-mandated caps, mostly to fill school budget deficits. Local governments and school boards who think the only way to avoid...

As Bianca noted yesterday, legislators in Ohio are pushing major changes to the collective bargaining rights of public sector unions in the state, among them teacher unions. Many of the proposed changes, like eliminating step-and-lane salary increases, would be very positive.

One change struck me as odd among the proposals: a ban on districts paying more than 80% of teachers' health care costs. I get where the proposal is coming from ? when state and local tax coffers are full, politicians (school board members among them) love to win points with unions through huge giveaways to teachers. It's not a response to demands in the labor market, but blatant vote mongering. We see the fruits of these popular but irresponsible moves when tax revenues dry up.

If onerous state mandates like step-and-lane are removed, one hopes some Ohio districts will step up to develop better, more effective human capital policies that drive student achievement and attract high performing teachers. What if the part of the labor market those districts target demands benefits covering 85% of health care costs in exchange for smarter accountability and better instruction? Why tie districts down in new ways while cutting old mandates?...

Selective public high schools in DC, educating mostly affluent students, receive more dollars per pupil than open enrollment neighborhood schools. That's the (not very surprising) finding of a new analysis by the Senior High Alliance of Parents, Principals and Educators, a local advocacy group.

DC, like many large urban districts, has an ongoing discussion about how appropriate these kinds of magnet programs are. As detailed in the report, they're usually expensive. Some in DC think this is money well spent to keep high-earning professional families in the city; others contend that the money should be spent where it would have the highest impact on student achievement, usually in high-poverty schools.

The more surprising part of the news is that this kind of data is available and transparent to district leadership in DC at all, much less to the general public. Too many systems apply average salaries to school budgets districtwide, giving them very little visibility into how spending in a given school matches up with the community's priorities. Marguerite Roza's recent book, Educational Economics: Where Do School Funds Go?describes this problem in some detail.

As Peter noted earlier, we're witnessing something rare in New York right now ? a Democratic governor cutting budgets, pushing for property tax caps, even targeting education spending for aggressive reductions. With a $10 billion budget deficit and all its Federal stimulus funding squandered, this may be just what the state needs.

What is perhaps most laudable in Andrew Cuomo's proposed budget is that he seems to be taking the crisis as a chance to bend the cost curve in government for good, taking on basic funding formulas in addition to proposing temporary cuts.?What's not clear, however, is that he, the legislature, public-sector unions, or other players in the state are thinking creatively enough about how to re-envision how government works.

On Monday, Lou Gerstner, former CEO of IBM, had an op-ed in the Wall Street Journal arguing for just this kind of restructuring, and one of his fundamental tenets is, ?Focus on programs, not costs.? In a previous life, when I was a management consultant, this was my dogma. If tasked with cutting 5% of a business unit's budget for a client, my first step was to think about how I...

Referring to the Model T, Henry Ford famously said, ?A customer can have a car painted any color that he wants so long as it is black.? It turns out that Dr. Jerry Weast, the superintendent in Montgomery County, Maryland, where I live, feels the same way about school choice ? parents can send their kids to any school they want, as long as it's part of the traditional public school system (or you're wealthy enough to send your child to a private school):

So we look at things about school choice, and there's over 150 private schools in our community. And so there's choices for. [sic] And there's choices in our 200 [district] schools with their thematic approaches. So choice is something that's in abundant supply in Montgomery County.

The background is that the Montgomery County Board of Education recently denied two applications to start public charter schools in the county on Dr. Weast's recommendation. The State Board of Education yesterday overturned both those decisions, citing anti-charter bias, an arbitrary review process that broke the county's own rules, and a made-up standard of ?uniqueness? for new public charter schools.

Kevin Carey of Education Sector has a great post out today looking at the use of teacher quality data in personnel decisions. He's writing about higher education, but the point applies to K-12 as well:

If you're trying to evaluate teacher effectiveness for the purposes of deciding who is most likely to help students learn, the information needs to be accurate enough so the decisions you make are likely to be better decisions than those you would have made without the information?and that's all. If, for example, you had to choose between hiring Teacher A and Teacher B, and you had evidence that Teacher A was much more effective that met P < .10 standards of accuracy but not P < .05, that evidence might not be good enough to get into a peer-reviewed journal but you'd be an idiot if you ignored it in choosing who to hire. That's because while evidence of teacher effects can theoretically wait forever until it's good enough to enter the scholarly record, someone needs to be hired for teaching?today.

We hear the same kinds of criticisms in K-12 about value-added data and other metrics for assessing teacher quality. Just...

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About The Editor

Director of Finance and Operations;

Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.